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Spotify CEO: “Artists Will Make a Decent Living Off Streaming In Just a Few Years”

Spotify CEO Daniel Ek, in a recent interview with CNN Money…

danielekCNN

 

CNN Tech Correspondent Laurie Segall: Do you think that one day artists will be able to find a business model, and will really be able to make a living doing what they love and getting their music out there?

Spotify CEO Daniel Ek: I’m 100% sure, and what’s going to happen is the more people that come online, the more people that are listening, it just means that the base of people is going to expand.  And as that happens, even more revenue will come back to the music industry.  So I’m positive that the entire music industry is going to be a lot bigger, and a lot more healthier than its ever been.

CNN: At what point can an artist survive on a Spotify income?

Ek: Well, I mean, the interesting thing here is that we’re just in its infancy when it comes to streaming.  And we just last week had an artist announcement where we basically said if there would be 40 million subscribers paying for a service like Spotify, it would be more than anything else in the entire music industry, including iTunes.

And we’re not too far away from that number, which is the interesting thing.  So, I’m absolutely sure that artists will make a decent living, and actually the industry will be larger than it’s ever been, in the next few years.

 (full interview, here)

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Comments (68)
  1. Anonymous

    Haha, yeah… :)

    Again, there’s only way for artists to make a living off streaming:

    Start a streaming service.


    Reply
    1. Johnny.

      that’s the trick,its getting hooked up on wall street and filling up accounts with investors savings , music was sold out a long time ago to Apple for crumbs


      Reply
  2. Anonymous

    “Ek: Well, I mean, the interesting thing here is that we’re just in its infancy when it comes to streaming”

    Worst bs, ever. Audio-only streaming is old as sin, and it’s complete failure on all accounts:

    It loses money by the hour, it’s still completely unknown after all these years compared to video services, and it doesn’t pay artists.


    Reply
    1. jw

      If it’s still completely unknown, that would mean that it’s still in its infancy. Spotify has only been available for 3 years in the U.S. It’s actually doing much better than iTunes was doing 3 years in.


      Reply
      1. Anonymous

        When you’ve been on the market for 6 long years — like Spotify — and you still are a total failure, then it’s time to move on.

        Sorry, but that’s just the way it is. And don’t go on about the US either, things change, 80% of YouTube’s users come from outside the US today. Google ‘global’…

        And Spotify’s troubles haven’t even begun yet. Wait a few months and see what happens when Google launches YouTube Music Key…

        Bye bye, Spotify.


        Reply
        1. GGG

          Would you say that to artists to? Give up if you’re not a superstar in 2 years!


          Reply
          1. Anonymous

            Spotify offers audio-only tracks from selected artists to a video world. Windowing turned the service into a museum where you can’t find the latests hits you want to hear.

            YouTube Music Key offers UMG/Sony/Warner’s complete catalogs of audio, music videos, concert footage, interviews, behind-the-scenes — ON RELEASE DAY, NO WINDOWING EVER!

            YouTube Music Key is going to kill Spotify, iTunes and the major labels. You can pretend it won’t happen till it hits you between the eyes, or you can start working on a survival strategy.


            Reply
            1. Anonymous

              … as for survival strategies, here’s one:

              1) Use Twitter as your primary site. Twitter’s most popular accounts now have 50% more followers than the most popular YouTube channel — the most popular YouTube channel, PewDiePie, closed its comment section forever last week and moved it to… Twitter.

              2) Use a better-paying YouTube alternative such as Videscape.com (when it’s out of beta) and embed its videos on Twitter. Then you’re not forced to make your entire catalogs available for free on release day, as is the case with YouTube Music Key.

              3) Use an unrestricted crowdfunding service like Patreon instead of YouTube’s limited version.


              Reply
              1. Steve

                Well, how about putting your money where your mouth is and advancing us some money to record and live in the meantime like the record labels used to do?


                Reply
                1. Anonymous

                  Huh? :)

                  You think I enjoy the current climate? But we have to face the facts:

                  You can’t use labels to finance production or develop new acts anymore, the money is gone.

                  And YouTube Music Key is going to eradicate all remaining sources of income in the near future, at least for those who signed with Google, directly or indirectly.

                  So why don’t you suggest a better strategy if you have one? Believe me, I’m all ears!


                  Reply
              2. Scott

                Please explain how a Twitter account is going to make you a dime. You can link to sites and promote all you want but where is the revenue from Twitter itself going to actually come from?


                Reply
                1. Anonymous

                  The revenue comes from the services you embed:

                  Monetized video streaming, crowdfunding links, download sales — even from your own site! And that’s the beauty of it: The embedded income-source doesn’t have to be well known by itself because you’re piggybacking on Twitter’s huge user base.

                  Like I said, the most popular Twitter accounts now have more followers than YouTube channels. And you have all the world’s journalists and blogs one click away.

                  That’s why major acts tweet 1-10 times a day, constantly linking to their latest releases.


                  Reply
            2. GGG

              Cool story, bro. Also, way to answer my question.

              As for YTMK, maybe it will kill Spotify, maybe it won’t. But you continue to underestimate audio-only music consumption, and it’s really weird because I don’t even see the point other than to try and attack Spotify. Millions of people drive to work every day. They are not watching music videos or else they’d all be dead. I see hundreds of people on the subway/bus every week. The ones staring at their screen are NEVER watching music videos. Seriously. Not that I look at every single person’s phone so I’m sure some people do, but when the headphones are in, I have never once seen someone watching a music video. Playing games, watching a show/movie, not looking at anything, sure. Watching a music video? Not once.

              You also need to look at YouTube more. You realize how many millions of views come from “videos” that are either lyrics or literally the album cover just sitting there? Clearly people play audio-only on a video platform. So sure, a service that offers both is, on paper, the better service, but it will come down to functionality.

              Last, I don’t need a survival strategy. I’ve been adapting since I got into this industry. Much better than sitting in a dark room wallowing in tears and blaming any lack of success on everything except you just not being good enough.


              Reply
              1. Anonymous

                “I’ve been adapting since I got into this industry”

                I don’t doubt that, you do sound like a surviver. Which is why it puzzles me to see you clinging to a sinking ship.

                It’s not a pleasant experience to watch one’s favorite team lose — and believe me, I know from (I was a YouTube classic fan for a long time and an iTunes believer even longer) — but sometimes you just have to let go.


                Reply
                1. GGG

                  Well, for the record, (and I’ve said this on here before, just not recently), as much as I sound like Spotify-specific fanboy, it’s more streaming in general and Spotify just happens to be the biggest. If Deezer or something new came along and crushed it, I wouldn’t care. I’m just pushing for some streaming service that gets a big enough user base that payout averages scale up to giving everyone what majors get now or, preferably obviously, even higher.


                  Reply
                  1. Anonymous

                    “I’m just pushing for some streaming service that gets a big enough user base that payout averages scale up to giving everyone what majors get now or, preferably obviously, even higher”

                    I’m 100% with you on that.

                    I simply suggest a Twitter/video-streaming combo because I think it’s the most realistic way to accomplish what you want.

                    Twitter is extremely popular and you can embed anything — video streaming, sales, audio, vines, images, crowdfunding, personal links — while you chat with fans. Its huge popularity means that the services you embed don’t have to particularly well known on their own.


                    Reply
                    1. GGG

                      I’d be down with that.


          2. Johnny.

            Suggesting to say stupidity isnt senseless… artists do art for passion,business is for financial gain….mixing and comparing these non it common denominators is fruit salad talk from the moon….


            Reply
            1. Anonymous

              “artists do art for passion,business is for financial gain”

              Here’s how it works: We make art for art’s sake, and we sell it for money.


              Reply
  3. steveh

    bullshit!

    40 million subscribers will definitely not provide the income he is claiming.

    400 million subscribers:- now we would be talking.

    But can the business and technical infrastructures of Spotify handle 400 mil subscribers? I don’t think so.


    Reply
  4. Dry Roasted

    Spotify CEO: “BANKERS Will Make a Decent Living Off Streaming In Just a Few Years”


    Reply
  5. Anonymous

    Plus, lasting peace in the Middle East is just around the corner.


    Reply
  6. Granny

    100% sure of what? he did not answer the question, rather referred to something else.
    empty words, really, meaning nothing.


    Reply
  7. Granny

    …. and on second thought, Spotify CEO and employees make a living off streaming. Parasites, well, I mean, the interesting thing here is that they’re sucking the life out of creators/artists, earning their income first, paying their bills first.


    Reply
  8. Yep

    Ok, if you are not making enough money on Spotify then make better music and integrate your catalogue into a more ‘streaming friendly’ marketing strategy.

    Collaborate, build playlists EVERY DAY, socialize, spread the word, integrate Spotify into your social networking and into your web pages and YOUR BLOGS!

    Don’t forget you get paid every time somebody listens, so drip feed your fans every day and the money will build.


    Reply
    1. Jack

      Hey, your advice is really great and positive. Is there anywhere you can point me to in order to maximize my Spotify releases? any advice would be really appreciated.
      jack


      Reply
    2. Duke

      My friend just had 4 million streams of her hit song. She got $144. That is the reality. You obviously know very little about this business


      Reply
      1. Anonymous

        Did she record the song or was she a songwriter? If it was the first, then her label is clearly pocketing most of her money. But that’s not Spotify’s problem. If she was a songwriter, she was pretty clearly a co-writer. When there are multiple songwriters and a publisher to pay, you shouldn’t expect to make much money.


        Reply
      2. GGG

        Even at the shitty end of the payouts, i.e. .004/play, that song grossed $16K. So her issue is not with Spotify, it’s with either her label, her PROs, or her lack of understanding how royalties work. Also, what was that $144 from? It was probably one soundscan or ASCAP check.

        You can certainly complain even $16K is too low for 4M streams, but getting $144 is someone else taking advantage of her, or she’s using one type of statement to account for everything.


        Reply
        1. dymyninc

          No, I am the songwriter and the label and artist and that is all you get , less than a penny a stream, when people only stream their music and stop buying it as it went for my catalogue since january when all these services including spotify started having a much bigger presence.
          when ascap would pay royalties for radio and tv play, the payouts were at a different level than streaming services pay


          Reply
          1. GGG

            You are the person with a song streamed 4M times? 4M times .004 is 16K. Spotify and ASCAP payouts are not the same thing. No offense, but I think you need to learn more about where your money is coming from. Or call up Spotify and ask them why your pay is so low, because even by their own admittedly low average rates for unsigned acts, you should have gotten far more than $144. So either you’re looking at the wrong thing, your song wasn’t really played 4M times, or something happened on Spotify’s end and they owe you a lot more money.


            Reply
  9. john

    streaming is bring in hoards more fucking cash than iTunes ever did.

    people who laugh at this article are quite dumb.

    obviously if you have 3 listeners you won’t make a living but it is possible to do so with lots of tracks and hard work.


    Reply
    1. details

      hi john
      can you give details please?

      how do you get other people listening to your playlists? best methods?
      how many songs do you have,
      how many playlists have you made,
      how many plays do they get,
      how many hours a week do you spend promoting / making them,
      what kind of monthly $ do you see? anything else?

      thanks


      Reply
      1. john

        how do you get other people listening to your playlists? best methods?
        making good timeless music. our music is also good for focusing and sleeping so that helps.

        how many songs do you have
        120+ and many songs re-appear on compilations etc.

        how many playlists have you made,
        only a few

        how many plays do they get,
        Approaching 1 mil per month, partly due to spotify promoting our music on some of their playlists.

        how many hours a week do you spend promoting / making them,
        0

        what kind of monthly $ do you see? anything else?
        our total digital royalty income has been growing rapidly. it’s real money that can pay rents and buy stuff. i won’t get into numbers here, but rest assured, i am not laughing at Daniel Ek…

        now obviously not every group of kids making music in a garage is going to have that kind of success but this has now been my passion for 10 years and my full time career for 5.


        Reply
        1. Scott

          Please link to your music on Spotify. I would like to listen to it and see the number of streams. There is no reason to be shy. Thanks.


          Reply
      2. Me

        It’s all about networking. Promote your playlists on all social platforms. Reach out to other artists and see if they’ll add you to their playlists if you add them to yours. Then you can both promote each others playlists.


        Reply
  10. Guest Star

    Translation: We are going to continue to screw artists, with their label’s approval since they got their money upfront, for at least another decade. . . . .


    Reply
  11. Schmorty

    This is the wolf telling us that the sheep are safe.


    Reply
  12. Duke

    I love some of these comments. Build a big catalog-With what-Crappy songs?

    What do you expect these guys to say-They along with the labels have raped and pillaged this business

    Duke


    Reply
  13. FrankyP

    No-one will ever make a living off of Spotify unless they play one song to all their subscribers 24/7/52/365 X 5.


    Reply
  14. Willis

    What a crEK of shEK, Mr Ek.


    Reply
  15. Robbie Fields

    Look, I’ve been one of the biggest Spotify bashers here. But suddenly they are now paying 500% more than a year ago, at least in my corner. The trend is now UP. We still have not replaced the disrupted iTunes money but we’re getting close. And even with all the additional streaming monies, we are nowhere near replacing the revenue flows from the 20th century physical business model.

    Yet, 5 years in the distance we may yet claw enough back not to feel as vulnerable as we do today.

    All that said, I still see little to get hopeful about from either Japan or Europe, not from an American perspective anyway.


    Reply
  16. Justin Mayer

    Sure thing bro, just like the longtail scam.

    All he’ll be doing is trying anything possible to boost that perceived value back up so he can cash the fuck out, period!

    Luckily for him musos and artists are notorious dreamers and extremely gullible and will hold onto anything to keep their dream alive.

    Like any of the streaming people give an actual fuck about anything to do with music at all, all they give a fuck about is stacking as much money as possible regardless the collateral damage, and that is a smart play!

    :)


    Reply
  17. ray ray

    preach


    Reply
  18. Johnny.

    till they offer one dime per play,like old jukeboxes, wont be near those old business models of capitalist industry


    Reply
  19. Anonymous

    Streaming is the only place music revenue is growing and it’s growing quicker then anything I’ve seen. You have to a total moron to ignore it at this point.


    Reply
  20. anontech

    everyone bashing streaming is going to look very stupid soon.


    Reply
  21. Sheryl Diane

    Considering we live on peanuts now, any REAL share of the revenue stream could improve the daily lives of so many struggling yet excellent musicians!


    Reply
  22. Illinois Country Songwriter

    The scenario facing artists right now is exactly how a union comes about. Nobody wants to treat a group fairly and takes advantage of them as they are isolated or divided so then somebody says, “You know what we need to do? We need to organize! We need to dictate to these abusers the way the future is going to be from here on out!”


    Reply
    1. Anonymous

      We need to organize! We need to dictate to these abusers the way the future is going to be from here on out!”

      Indeed.

      It’s too late for major label artists, Google owns their rights and property now, but the rest of us have to organize.

      It would be a good idea to launch our own audio- and video streaming service, owned and controlled by artists, as well.


      Reply
    2. david lowery

      Also @ llinois songwriter. We can’t organize because of the DOJ consent decree. we would literally be found in contempt of court and go to jail. That’s why I say the consent decree should be modified or ended. The logic of the DOJ supervision was to protect consumers from predatory pricing from songwriters and their “union” (ASCAP) in 1941. but over the last 70 years this has been distorted so that the consent decree is protecting huge multi-billion dollar companies from market forces. exacting monopsony pricing from the songwriters. Songwriters are literally born into court limitation of their rights. Without trial or fair hearing Totally unconstitutional. Write the DOJ anti-trust section. they are finally listening.


      Reply
  23. david lowery

    I call on “John” to say exactly who he is and the name of his band. I would like to run his soundscan, next big sound data and other publicly available metrics.

    To be clear I’m not saying he is lying, I just want to see how he’s doing it. Call it scientific curiosity.

    I’ve been very public posting my royalty statements indicating streams and revenue. I’d like to see someone who is pro streaming embrace the same level of transparency. Why?

    I’d love to be wrong on this.

    Also I want JW to come out ands say exactly who he is and who he works for. I’d like for us all to evaluate his statements based on his personal financial incentives.


    Reply
    1. GGG

      Maybe you posted this on your blog and I missed it, but do you have access to, or have you deduced what your label is grossing from streaming?


      Reply
    2. agree

      i totally agree – i was the one who asked above specifically how he did it (but got mostly generic answers).

      the only way i can see an artist, especially an indie, making money off spotify is to game it somehow (have you family, cousins, etc) playing you songs 24/7, or software that somehow tricks it, or have chinese server farms enlisted to play tracks, or something. or magic. magic could do it. or lying. or maybe he lives in the sewerrs in calcutta, where rent is only 16 cents a month… spotify payouts would cover that.


      Reply
    3. Anonymous

      “Also I want JW to come out ands say exactly who he is”

      JW is a criminal — and a pretty weird one at that: He not only steals music, he also recently defended a article by the notorious Rick Falkvinge.

      Here’s the headline:

      Three Reasons Child Porn Must Be Re-Legalized In The Coming Decade

      And here’s what JW said:

      “he [Rick Falkvinge] does make interesting points about the criminalization of the younger generation”


      Reply
      1. Anonymous

        Oh dear….


        Reply
    4. Scott

      I asked hIm directly as a reply to link to his music on spotify before I saw your comment asking the same thing. I don’t understand why you wouldn’t link to your music and promote it using this wonderful tool known as the internet, which I keep hearing is so great for musicians.

      I am not holding my breath.


      Reply
    5. Paul Resnikoff

      I agree with David. I’ve never seen a royalty statement from an artist that is making the payouts that Spotify claims.

      Why not?

      Or, better posed, why am I only seeing the dismal statements from artists making far less than the claimed $0.005, $0.007, or supposedly better? Is it just the ones that somehow are getting lower that are publicly sharing their statements? Is this vast number of winning artists deciding to just keep quiet?

      Or, is Spotify lacking transparency and attempting to mislead the artist community into thinking there is more money than there actually is?

      Look at Ari Herstand, one of the most influential writers in this space and an ardent defender of streaming. Even he is having doubts at this point: he went to Spotify’s artist-in-residence, DA Wallach, and asked this very question. He only received an evasive half answer as to the discrepancies.

      I’m sorry Spotify, if you really want to win over the respect of the artist community, then be honest with them. Otherwise, you will keep getting called out, over and over again. And you will lose the support of your most ardent supporters, like Ari.


      Reply
      1. GGG

        I’ve said this before but must have fallen through the cracks.

        Spotify’s numbers are most likely correct, but also still misleading to a degree. For example, my acts’ Spotify per-play pay ranges from an abysmal .001 to over a penny (I think the highest I’ve seen is 1.4cents). I get a lot of .008/.009 but the average is still in the .005 range. So I imagine most indie artists are the same.

        Now, the majors, if it’s true they get higher pay outs, probably legitimately average around .008. And even though there’s a shitload more unsigned acts than majors, the major acts are being played a TON more. So you could have hundreds or thousands more plays for majors for every 1 indie play. Making Spotify’s average of .006 true, albeit a little misleading.


        Reply
  24. Yep

    A few more positive comments here than a few months ago. Considering payments are normally 2 months out, things are looking pretty good! It could be analytic’s that people are seeing. Either way, this service is transparent, pays on time, provides a reliable analytics feed, is open to indies, has pretty loose meta guidelines and it born in Sweden (a beautiful country)

    Give it 12 months and you’ll all be very happy.


    Reply
    1. Anonymous

      “Give it 12 months and you’ll all be very happy”

      Because Spotify will be dead.


      Reply
  25. WDMNYC

    Please forgive this entry-level question. I’m getting ready to release the first song (and music video) off my new cd, the first new release in many years. I’m the performer as well as the lyricist. My co-writer and I have been discussing the possibility of only releasing it for download, not streaming, at least for a set period of time.

    I’m still studying the whole streaming model, but the cynic in me thinks that all these companies are starting streaming services because they’ve discovered another way to rake in money while paying the artists even less than before.

    I’m curious to know everyone’s thoughts on the pros and cons of choosing to release only via downloads (thinking of using bandcamp.com).

    Thanks in advance for the collected wisdom.


    Reply
    1. Anonymous

      “My co-writer and I have been discussing the possibility of only releasing it for download, not streaming, at least for a set period of time”

      Good strategy!

      Most acts sell most of their downloads immediately after release, so it’s crucial not to give your song away during week 1 and/or 2.

      This type of windowing also gives you a wonderful opportunity to contact your fans and the press again when you release the track for streaming. A good time to do that is when sales begin to drop.


      Reply
      1. hippydog

        Quote “Most acts sell most of their downloads immediately after release”

        correction.. most well known artists with an existing fan-base sell most of their downloads soon after release..

        indies?
        not so much


        Reply
    2. Scott

      I worked in record retail for over 10 years and currently work for a small independent music distributor.

      Here’s what I would do:

      I would use Spotify or any other streaming service only for the single if you decide to use it at all when you release the CD and Video. Think of it like your own radio station. You decide what single or album tracks to release. The Black Keys have done this with a recent release. I would only put all of the the tracks for your release on a streaming service after the initial sales for physical and digital download flattened so that it wasn’t harming a more profitable revenue stream.


      Reply
      1. FarePlay

        Scott, your right. In an interesting turn of events musicians can actually control what songs of theirs are available for airplay on streaming stations like Spotify. And bands/musicians following that strategy can actually use these “all you can find” streaming services to sell recorded music.


        Reply

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